20 December 2010

I haven't updated the Dow chart yet, but the indicators are up to date.  The drift upwards continues unabated.  Pretty soon we'll all be rich.  Why work?

Inside every cynical person, there is a disappointed idealist.
George Carlin

13 December 2010

Sorry if the charts suck.  I'm on the road and this laptop is so bad that I can't even adjust the zoom in paint.  If I've ever helped you earn some money, donate something to help me get a better laptop.  ;)

 Percent of stocks two standard deviations below 40 day moving average seems to be rising while the market is rising (SPY is actually two std dev above 50 day right now).  Remember two standard deviations is significant in statistics because anything inside that amount represents the result expected 95% of the time.  Between the indexes and the individual stocks, there is still more confusion than on father's day at an orphanage.  However the Russell 2000 has remained strong.

Percent of stocks two standard deviations below 200 day moving average also is in a positive up-trend since early 2010.  Note that the "floor" after the Greece crisis never returned to levels before it.

Nasdaq advance/decline was negative today and barely above the previous high.  Overall advance/decline still didn't make a new high.  McClellan was up today, but up less than it was on Friday.  Still quite a ways below highs.  The Nasdaq Summation index (NASI) is nearing old highs.

I've been reading Bert Dohmen's book Prelude to Meltdown about his Wellington posts during 2007.  He  evaluates mainly liquidity standpoint as well as sentiment.  From a liquidity (not money as in gold, but as in credit - important because credit can disappear far faster) standpoint, there are some liquidity problems rearing their head in the municipal bond market which really hasn't recovered since 2007.  LIBOR is still on the floor.  The CPI adjusted monetary base actually is under 0% growth for the year.  However, it grew around 100% in 2009 - resulted in a 80% rally.  I made a new scan to replicate his "buying climax" data from Investor's Intelligence.  It will take a while to compile a useful trend, but today there are 369 buying climaxes.  A buying climax is when within the past week a new 52 week high was made and the current close is under the close a week ago (five days).  The Euro broke its negative trendline today, but failed at the 200 day EMA.  The AUDUSD carry trade is still below highs, but trending upwards.  I believe (my application crashed) that the AUDJPY made new highs today so that "liquidity" providing trade is still alive and well.

Best of luck.

Oldie, but a goodie.

8 December 2010

Mainly, I'm just amazed that the Nasdaq still managed to go up today after the large reversal yesterday.  However, it still looks like A LOT of stocks went down.  Upon going through what has now entered the short-term down category, it appears most are resource stocks (URRE being an example).  Banks did well today.

I don't really feel like posting tonight so I'll just put a few charts:

 Red close on McClellan when Nasdaq closes up .5%, Huh?

This massive drop also didn't show up in the indexes.

One still bullish thing is that that Dow-Transports is still quite a bit above its old high, while the Dow hasn't confirmed.  Transports generally lead the Dow.

If the stock market doesn't go up on 0% interest rates, QE2, constant POMO or Xmas rally, what is that saying?

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Money is condensed, preserved labor. The fact that a single man you've never met can dilute your life's labor in order to "help us all (which really means the Govt and the monster banks)," should bother you. The fact that he also has the power make all of your life's labor and all your expended passion worthless in a second should enrage you.

Democracy is a pathetic belief in the collective wisdom of individual ignorance.
H. L. Mencken

21 November 2010

Friday had a gap down and then some strength into the close.  The McClellan Summation still declined and is still in a negative trend, but not by very much.  The rate of decline also slowed from Thursday. 

My medium term indicator is holding at around 50% long and has risen the past two days.  My short-term indicator is at around 49% Hold Long and has climbed rapidly from the 16% low from last Tuesday. 

As I sit here drinking my kale, onion, celery, green cabbage, broccoli, and carrot juice (trying to be healthy), I see that the AUDJPY has made a new high on the finalization of the Irish bailout - very encouraging for stock market bulls as this funding carry trade remains positive.  It appears to be at the upper-bound of its ascending channel.  Considering the stock market broke its descending resistance line on the GM day and tested it on Friday, there may be some positive action for the next few days at least - also add-in that it is Thanksgiving week which is perfectly suited for a low-volume melt-up as no humans participate.  While this happens, for the other longer-term bears out there, I like this product to help protect my adrenal glands and mood - also ensure adequate levels of magnesium are ingested to induce relaxation.  US Index futures (NQ, ES) also gapped up tonight on the news.  Dollar is sitting on support, the previous high resistance line. 

Now, we wait for bad news to show up out of Portugal, Spain, Italy, then France, and maybe Germany.  Then UK and the US.

18 November 2010

The Dow gapped up about 100 pts of the 173 it was up today. It looks like we closed the gap down from Tuesday. It also turned out to be a great day to not be short IRE or AIB. Remember, I closed last week sometime and I was upset that I closed a bit early, but overall, it turned out to be the right decision.

What a great day to coincide for a great performance with GM's SPO (Second Public Offering). Unfortunately, GM could not be short-sold today. However, it still declined 5% intra-day. Fantastic.

So in order to bailout Ireland, more debt was taken on by it and other countries? That sounds like a huge plan for failure. Isn't too much debt what got us into this mess? Extend and pretend.

That is what I don't understand about a lot of this: the failed business models - of sovereigns and the state sponsored companies (TBTFs) - have not been changed, we've just thrown more leverage at them and started to pray more.

No charts. Its late. Short-term indicators are around 72% bearish, but becoming more bullish. Medium term basically unchanged from yesterday. McClellan is in a downtrend still, but had a strong day today rapidly slowing the rate of decline.

That's Ugly

Same with the muni bond funds that all broke through their 200 day moving average yesterday.  Much like they did in 2007 and stayed under until early 2009.

Pessimism Pervades?

Yahoo Finance headline certainly has it wrong.  Because from the investment perspective, a lot of people are bullish.  Looks like the 2003ers had it right, but that was about it.  1987 and 2000 look pretty dead on from a contrarian perspective.

Data from AAII

 

No Post

McClellan broke downward today.  Who knows if stuff will get ramped tomorrow for POMO to reverse this trend.  I don't really care. The days are numbered.

I personally think the globalists (those who support building a bureaucratic empire, taking from one to give to another, and making "the good of society" become the purpose for any individual's life) are more incestuous with Wall St. than the Republicans.    Of course, this is not true in all cases - just look at McCain or any other statist. No, I'm not hinting at outright premeditated evil by these folks.  In fact, the opposite might be true.  Unfortunately, as history has shown, spoiling people ruins people.  "The road to hell is paved with good intentions."

Rallying the market has tried to be the daily "Dancing with the Stars" to distract the public from the fact that they are being fleeced through higher prices and joblessness to keep the establishment from changing.  Since that hasn't worked, Republicans will win most seats, and the markets will likely get hammered.  QE2 - 9000 might slow it, but those effects will have diminishing returns eventually as well.

I strictly adhere to neither party because I think the system is a farce.  However, I do vote for individuals that share my belief system.

Lot's of big name people (Gross, Grantham, Orszag) appear to be catching on that monetary policy manipulation only changes the leverage of an economy and doesn't actually improve it.  Interesting development.

Silver manipulation charges are finally being brought to court.  This is something I brought up almost a year ago and a lot of others did before me.

Update:  dollar hit most recent high and has reversed slightly as of 2236 EDT.  That high needs to be taken out.

Best of luck.

Short-Term Chart Updates

Against all odds, it looks like this thing wants to start climbing again.  It is still below recent highs, but not by much.  The TSV has a negative divergence (middle area), but this can exist for some time like in April.  Note that it currently has a negative divergence from the highs in early May despite some of the indexes (Nasdaq 100, DIA) beating it.  I assume this could also be closed if we continue to get more gaps (yellow lines and one more from today) than the Tube.

 Check out the insane height on that moving average.  I forgot the US stock market was made-up entirely of companies that found the cure for cancer.  I wouldn't say this has been defeated yet.  It can certainly levitate if it wants to.

 The new highs are sad to watch.  The indexes (especially Nasdaq 100) have mostly tagged or beat their April highs, but new (260 trading day = 1 calendar year) highs are barely half of what they were in April.  I assume this divergence can be undone if everything keeps getting ramped, but it has not yet.

 Usually I don't share this one or really use it.  This is basically stocks that have prices going one way (using the short-term indicators I use below) while indicators I use (TSV, MS, MACD, BOP) are 100% the opposite way.  It has been climbing, but usually is better at finding dead-cat bounces much like the Europe bailout spike seen on the chart.  It is interesting that it is seemingly climbing while we are making new highs on the indexes.

This moving average is as high as it was during the April run-up.  The blue-line has managed to stay stronger than the Viagra four-hour erection.  As if that is a bad thing!

 The Nasdaq 100 may be strong with AAPL, GOOG, AMZN, PCLN, NFLX, but the judging from the Nasdaq advance/decline line, it has less leadership than the G7.

 It is pretty much do or die time for the dollar.  If it craps its pants and breaks through this support and the one lower, it might get to the point where it going down is not good for stocks (long-term, it is not because commodity prices - production inputs go up more), but who knows in this perverse universe.

TXN (Texas Instruments) beat estimates and then lowered guidance through the end of the year and was down after hours.  However, its going to take a bigger news story than this.  According to the Bradley Siderograph, today was a turning point.  I'm not going to bet on it, yet. 

Update:  Oh, yeah.  VIX was positive today.  Huh?

Wall Street people learn nothing and forget everything.
Benjamin Graham

Mistake

I posted last week that the dollar had broken lower support following reading Denninger's post.  That was a case of seeing the tree before the forest (paying too much attention to intraday moves, not the sum of intraday moves).  Plus, I didn't do my own due diligence.  It really never broke the main support.  I apologize, but if you were just now becoming a bear on the dollar after a 15% decline (or the 33% decline this decade), you are already late to the party.  I've seen this three bottom pattern on other time scales and in many markets.  If it comes to fruition, dollar bears beware.  See the bottom of this post for one of the Euro and the Swiss Franc, but over a much shorter time-span.  However, I don't think that any of the fiats will be substantially stronger than hard assets, if at all.

 

Yesterday's move in the McClellan was erased and then some today.  We've had redness show up several times in this index the past few weeks only to be overcome the next day by a green posting.  We will have to see if it happens again tomorrow.  If it does, more divergences will build which will eventually have to become undone.  Its current price of 2645 is pretty damn high by any measure.

Best of luck.